Wednesday, February 13, 2013

Nokia files complaint against India tax raid

Nokia Corp. said Tuesday that it has sent letters of complaint to Indian tax authorities saying that tax officials in January raided its manufacturing facility in Chennai without giving a reason and suggested that this was illegal.

The Finnish handset maker said the raid runs "counter to the domestic laws of India and international standards" and that the action was "excessive, unacceptable and inconsistent with Indian standards of fair play and governance."

Indian tax officials weren't immediately available for comment.

Nokia, citing claims by anonymous tax officials in the media, said it appears that the action by the Indian tax authorities relates to tax on payments made for supplying software from its parent company in Finland for devices produced in India. Nokia said it is in compliance with local laws as well as a bilaterally negotiated Finnish and Indian tax treaty.

The company also said its transfer pricing policies "are fully in accordance with applicable legislation in India and Finland."

Nokia's factory in Chennai is one of the company's largest production facilities. It produces more than 20 models, including devices in Nokia's Asha range, which are aimed at consumers in emerging markets.

India's recent moves to tax Royal Dutch Shell PLC?and Nokia have stoked concern among foreign investors eyeing a piece of the nation's growth.

U.K.-based Vodafone Group PLC is fighting a case over paying more than $2 billion in taxes on its 2007 majority-stake purchase in a local telecom company from Hutchison Whampoa Ltd. and is also facing another charge from Indian authorities for allegedly under-pricing an issue of shares to a Mauritius-based company by about 13 billion rupees ($241 million).